House prices in different countries

[BagOfCrisps 24]

I'd be interested to know the trend of housing prices in different countries.

 

Until recently in the UK it was the only way is up but the last few years has seen a few... blips? or something different happening?

 

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UK house prices fall in July for only second time this year

 

UK house prices fell this month for the first time since February, as concern about the economic outlook put buyers off.

 

The average price of a UK home fell 0.5pc to £169,347 in July, according to the latest figures from Nationwide Building Society released on Thursday. This month's fall comes after prices stalled in June, and leaves them just 6.6pc higher than they were a year ago.

 

A combination of record low interest rates and far less unemployment than feared has helped prices rebound after slumping for 18 months in the wake of the credit crisis. However, Nationwide today suggested that the balance between buyers and sellers, which has also helped buoy prices, may be changing as the number of potential buyers dwindle.

[Schneebored 0]

I am sitting in a bit of an economic bubble here in Perth Aus, the general trend is an increase in house price due to the strength in the resource sector (pending current Government shenanigans!)...if I was here long term I would consider throwing some cash into the market...but meh, rather go on holiday live life like a rock star.

 

My house in England on the other hand sits there slowly not gaining any value. Atleast the mortgage is being paid off.

[bobby12 0]

Perth sounds like a bubble, hasn't it been booming there for ages now?

 

I think now is a very risky time to buy, with currencies collapsing. In Japan, I like the look of these 1% locked in 30 year housing loans (FLAT 35 etc) but on the other hand I look at the declining population, economic problems, rise of china etc and really wonder how this country will look in 15 years time.

[Schneebored 0]

Originally Posted By: bobby12

Perth sounds like a bubble, hasn't it been booming there for ages now?

only been here a whilst, and with no long term plans to stay I cant really comment.

It is sure to say that the resources pulled it through the GFC whilst the rest of the world was royally up poo poo creek.

[Mantas 3]

Our market here (east coast) has been relatively stagnant for 5 years now. The preceding 5 years saw massive gains. Not sure where it's heading now. Most analysts are predicting a few more years of stagnation or modest gain before another boom.

 

I love when marketers tell you that property doubles in value EVERY 7 years. What they don't tell you is that prices might be stagnant for 20 years, then triple in value in ONE year.

[Go Native 70]

Place I own in bayside Melbourne is still appreciating albeit at a slower pace than it was pre GFC. I bought and sold 5 places during the really good years when prices were appreciating at times near 100% a year. If only it had of lasted a few more years I'd be close to retirement now...

[indosnm 0]

Property is overpriced here (in OZ) but try telling anyone here that.

 

Everyone is so caught up in property and the common belief is that it can't go down!

You really wouldn't believe the things I see in my work with so called conservative investor close to or in retirement taking millions $$$ punts because they can't lose in property!

 

a quote from the SHM today

'If the sharemarket rose for 17 months straight and then tapered, people would not think twice. It might be wise to apply the same logic to our housing market,''

 

end rant.

[js 0]

A lot of the housing in Sydney is owned off-shore, which obviously inflates prices and makes it near impossible for prospective first home buyers to get into the market.

 

We really need to restrict residential ownership to citizens.

 

In the Eastern Suburbs of Sydney, a flat can cost $800K, a townhouse $1.2M. (Not-so-coincidentally, there is a huge Chinese population there - new money leaving their country to get qualification here, etc)

 

In the Western Suburbs there's a huge mix of prices. But it seems the starting price of a house is about $500K for something descent.

[bobby12 0]

I say it every time but a house should be for living in, not an investment vehicle, and governments should be doing what they can to get close to that ideal.

 

Else you just get a big wealth gap with the poor trapped in overpriced rental places, and others owning a ton of buy-to-lets getting their mortgages paid for them. This is the situation in UK and Oz.

 

It gives me great joy to see house prices coming down, I wish they would crash and burn all buy-to-letters.

[indosnm 0]

Originally Posted By: bobby12

I say it every time but a house should be for living in, not an investment vehicle, and governments should be doing what they can to get close to that ideal.

Else you just get a big wealth gap with the poor trapped in overpriced rental places, and others owning a ton of buy-to-lets getting their mortgages paid for them. This is the situation in UK and Oz.

It's happening here. If the govt announced that they were taking away the ability to claim deductions from negative gearing property it would change the whole market I think.

Around here you need to cough up $600k to get a standalone 3 bdr home, which is cheap by city standards but without the facilities. A lot of properties have been on the market for a long time now and I am happy to be sitting on the sidelines waiting for my opp.

[Mantas 3]

Originally Posted By: bobby12

I say it every time but a house should be for living in, not an investment vehicle, and governments should be doing what they can to get close to that ideal.

I totally agree.
I used to look out my window to see virgin bushland fronting the beach. Then along comes the developer/ investors and bull dozed the lot. Then they built massive ugly houses there. ( why do two people need 10 bedrooms?)
The construction jobs went to Sydney firms and houses were bought by Sydney investors. No one lives in the houses, no one contributes to the local community or the local economy.

It all looks good on someone's property portfolio though.

[panhead_pete 27]

Without property investors where would the people who rent live? MANY MANY people no matter what the structure of the Tax act etc will never be able to afford to buy. Negative gearing is in a way the transfer of socially provided housing from the public to private sector. If there wasnt a tax incentive to invest in housing why would you buy into a losing investment which at high interest rates and low growth periods is exactly what a house is?

 

Additionally if you are waiting for property prices to crash in Aus I think you are waiting in vain. The GFC has been and gone. Due to our mining industry and low level of debt thanks to previous government we got through it well. Why would they come down substaintially? Are there baragins out there - sure but you have to work for them.

 

Perth and Sydney prices, in the appropiate suburbs will continue to grow. Why? Because the fundamentals are there. Influx of people with capital.

 

There is always afforadble housing but people have deluded expectations that their 1st place will be the big 4x2 theatre room etc. So many of my mates see my pad and think thats what to aim at 1st up. Its my 6th place.

 

I could be wrong about all this, maybe so but up until now have gone alright but then again Im about to buy land in Japan where ALL the fundamentals are at best - pretty poor.

[panhead_pete 27]

Sorry guys - double post

[Mintyjulep 0]

This is my city - The whole place is flat bar the hills to the south east.

 

houses on the hills (expensive, but far from CBD)

houses to the north (ok, but far from CBD)

houses to the west (grotty, far from CBD)

 

central northwest (expensive, close to town)

central southwest (average, close to town)

central south (expensive, close to town)

central southeast - east - north (cheap, close to town)

 

I have NO idea why anyone in this city would pay up to a million for a house exactly the same as ours (but rennovated, whilst ours is a work in progress) in the central northwest, but we got ours in the central southeast for NZ$132,000.

 

Property is nonsensical, but I'm glad we got into it. I think we'll stay in our little house for a very long time.

[RobBright 35]

Originally Posted By: panhead_pete

Without property investors where would the people who rent live? MANY MANY people no matter what the structure of the Tax act etc will never be able to afford to buy.

What about the people that WANT to buy but can't as the buy-to-let owners have artificially increased the value of property in an area?
Thus people are forced to rent until they can build up a deposit large enough for a mortgage?

[Go Native 70]

I guess it depends whether you've had investment property during the boom whether you think it's a good thing or not. Certainly for myself I would be nowhere near as well off if I hadn't started investing in property over 10 years ago. Even though through much of that time I have not had a high income my net wealth has increased dramatically through buying and selling property. About the worst net return on a sale I've had over the years was 30% in 12 months and the best around 100%. I don't think I could have had as good returns in the stock market over that time. So whether or not housing should be an investment vehicle it's been damned good to me.

 

I think pete makes a very good point though. There is affordable housing in Aus but a lot of the younger people don't want to live where the affordable stuff is. They also want the sort of house that most Aussies wouldn't have considered buying until near retirement right up front as their first dwelling. Or instead of a big house few consider buying an apartment first up. Their expectations in my opinion are simply ridiculous.

[Mantas 3]

I partly agree with that GN. The prooblem for kids growing up in, say, northern beaches Sydney, would have a hard time excepting that they now have to move to Dubbo if they want to own a house. Apartment maybe, but jeez, they start around 400k. Not an easy ask for a kid on 35k a year. Housing affordability is at an all time low in Oz at the moment.

[indosnm 0]

GN, sure over the last decade property has been a great investment and one that alot of people with no idea (not saying you) have been able to profit from. And once you have that initial equity it just becomes easier to get into more as long as you can service it.

But the horror stories I have seen at work with people just going in for an investment because "Property never goes down" is enough to make you sick.

 

The returns you talk about on the sharemarket are achievable though not every day but if you are switched on you can make it happen. Just depends on your strategy.

 

The point about kids of today wanting it all straight up.. I'm in that group I guess, though it's more location than italian marble benches! You grow up living on the beach, why the hell do we have to piss off to 1-2 hrs inland?

That's a trade off I am not willing to take. I want to live close to the beach and if I have to rent until I have 2-300k saved then so be it.

[Go Native 70]

True but I started out very modestly with less than a 15K deposit on my first investment property. I actually bought an investment property before buying a place for myself to live in (I had cheap rent at the time). The sale of that property 18months later gave me the deposit for my first home plus some extra to put into another investment property. Plus I always bought where I could afford and never expected to live in my dream location from day one. That is simply a ridiculous expectation that only seems to have appeared recently. I have never really used negative gearing as all investment properties I've had were either fairly neutral or positively geared. I've never really had a high enough income to take much advantage of negative gearing. Still my net wealth has gone up something like over 3500% over the last 10 years mostly due to investment in property. I know no other way that I could have got such good returns. I was just lucky to get started near the beginning of a boom period.

 

I know housing prices aren't rising as much as they were 10 years ago but I think a lot of first home buyers who say grew up on the northern beaches are not being realistic about their first home purchase. They also want to live in a nice suburb close to the beach instead of looking out west where they might be able to afford. Then they complain that there is nothing affordable for them but it's just where is affordable is not up to the standards of the lifestyle they envisioned for themselves. And let's face it if you are only earning 35k a year in this day and age I'm not surprised you'd have trouble buying a house. 10 years ago I was on 70k a year and it was still hard to save much! (I earn a lot less now! )

 

In other big cities around the world like New York, London or Tokyo owning your own home close to the city has long been an almost impossibility for most people. Aussies just have to start coming to the same realisation.

[pie-eater 207]

When you say 35K, what kind of K are we talking, Australian or what?

 

When my grandmother died, I took over ownership of her house. It's just a terrace house but in good condition and has really shot up in value in those years. Desirable residences you see, terraces close to Wigan centre

 

Stalled the last few. Got to admit I don't check up on it much. Some people in there renting it for the last 8 years.

[Mantas 3]

Originally Posted By: Go Native

They also want to live in a nice suburb close to the beach instead of looking out west where they might be able to afford. Then they complain that there is nothing affordable for them but it's just where is affordable is not up to the standards of the lifestyle they envisioned for themselves. And let's face it if you are only earning 35k a year in this day and age I'm not surprised you'd have trouble buying a house. 10 years ago I was on 70k a year and it was still hard to save much! (I earn a lot less now! )

I know what your saying GN. My wife and I lived in a caravan in my parents backyard for 2 years while we saved for a deposit for a block of land. Then I spent 3 years owner building our first house. I even dug footings and trenches with a shovel to save on excavation costs (queue violins now ).
I think it comes down to more than 'standards of lifestyle they envisaged'. It's ALL they've ever known.
You rode the property boom wave well GN, but that wave has crashed on a lot of peoples heads. I dare say that I will have to help my kids out with property unless they want to move out west and start competing in line dancing and burn out competitions.

[Go Native 70]

Yep when my wife and I bought our first home it was a fixer upper and we did much of the work ourselves and it was a 3 bedroom place so we rented out the other 2 bedrooms to uni students which helped enormously to make the repayments. These days you can't just expect to be able to afford to live in the suburb you grew up in or nearby. There is still money to be made in property investing in Aus. All our spare cash currently is involved with a development group buying up land and doing subdivisions in a coastal town south of Melbourne. The area is booming at the moment with all the boomers retiring to the region. Point is there's still opportunity out there to make some pretty high returns quite quickly from property investment in Aus.

 

Quote:

The point about kids of today wanting it all straight up.. I'm in that group I guess, though it's more location than italian marble benches! You grow up living on the beach, why the hell do we have to piss off to 1-2 hrs inland?

That's a trade off I am not willing to take. I want to live close to the beach and if I have to rent until I have 2-300k saved then so be it.

 

Well if you can manage to save 2-300k you're doing better than I ever have. It would have taken me more than a lifetime to save that sort of cash without my investments!

[HelperElfMissy 42]

I am with Pete on the investors.

If there was an oversupply of rental properties and an under supply of homes to buy then it might be the investors 'artificially inflating' prices but the reality is that there is a severe shortage of rental properties here in Perth at the moment, and a lot of that has come about due to the incentives for private ownership of rental properties is not really there any more.

 

House prices are so expensive here because of an extreme under supply of properties. IMHO there are far too many single occupants living in 3/4 or 5 bedroom homes, particularly when it comes to state supplied housing. My FIL is in a state supplied 3 bedroom house on a 1/4 acre block and allowed to stay there. If they moved him to a 1 or 2 bedroom unit he would be safer, better supported and in no way disadvantaged, and then they could bulldoze the old crappy 3 bedder and build two 4 bedroom homes on that block which could house two entire families!

 

I also agree with GN and Mantas about starting small.

16 yrs ago we bought our own place. A tiny 3 bedroom 1 bathroom home built by the budget home builder of the time in a totally mortgage belt outer suburban suburb. After working hard and paying down some of the mortgage we moved to a nicer 4 x 2 in a nicer, closer in suburb - moved every 3 years until we ended up where we are now. Sometimes you gotta start with a big mortgage, newspaper taped to the windows, 2nd hand crappy furniture and plants you snaffled from your overgrown folks garden. Kids today think they have to start with the whole shebang - flat screens, leather lounges and miele appliances.

[Tex 3]

Originally Posted By: Mamabear

Kids today think they have to start with the whole shebang - flat screens, leather lounges and miele appliances.

And annual snow trips to Thredbo and Japan

[HelperElfMissy 42]

Originally Posted By: Tex

Originally Posted By: Mamabear

Kids today think they have to start with the whole shebang - flat screens, leather lounges and miele appliances.

And annual snow trips to Thredbo and Japan

yeah! Jeez... First plane trip for me I was 21 years old (to Tassie paid for by work). And I got my first passport when my poor injured 13 yr old was 6 months old..that would make me...27 or 28 ...and we thought we were flash going to Bali!